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Bond funds continue to be asset class of choice, says IMA

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Funds under management of UK domiciled investment funds were GBP339.2bn in February 2009, five per cent down on the previous month and 23 per cent lower than February 2008, according to

Funds under management of UK domiciled investment funds were GBP339.2bn in February 2009, five per cent down on the previous month and 23 per cent lower than February 2008, according to the Investment Management Association.

UK domiciled Isa funds under management of GBP66.8bn were six per cent down on the previous month and 21 per cent lower than the previous year.

UK domiciled investment fund Isas saw a net outflow of GBP112.5m in February 2009, compared to a net inflow of GBP2.0m the previous month and an outflow of GBP179.1m in February 2008.

The most popular UK domiciled Isa sector in February 2009 was UK All Companies, accounting for 19 per cent of gross Isa sales. In net terms the most popular ISA sector was Protected/Guaranteed Funds.

Net retail sales were GBP1.2bn. Bond funds had an inflow of GBP1.1bn, while equity funds saw an outflow of GBP66m. Institutional holdings of unit trusts and Oeics saw an inflow of GBP1.1bn.

The most popular sector in February 2009 was GBP Corporate Bond, representing 26 per cent of gross retail sales of UK domiciled funds. Ninety one per cent of gross retail sales into the GBP Corporate Bond sector were via the intermediary channel.

The most popular distribution channel for UK domiciled funds in February 2009 was the intermediary channel, representing 88 per cent of gross retail business. Gross Isa sales of GBP245m from fund supermarkets made them the dominant distributor of Isas, followed by GBP193m through sales force/tied agents.

The GBP Corporate Bond was the most popular UK domiciled net retail sector with inflows of GBP854.8m. The sector with the biggest outflows in February was Japan with net an outflow of GBP172.9m.         

Overseas funds under management of GBP13.7bn in February 2009 saw a ten per cent decrease on the previous month and were 16 per cent down on the previous year.

Overseas Isa assets of GBP214m increased by six per cent on the previous month but were down 39 per cent on the previous year.

Net retail sales of overseas domiciled funds in February 2009 saw an outflow of GBP39.0m compared to an inflow of GBP55.9m the previous month and an outflow of GBP22.7m the previous year.

Net retail sales of overseas domiciled investment fund Isas saw an outflow of GBP0.3m in February 2009, compared to an inflow of GBP0.3m the previous month and GBP2.4m in February 2008.

Richard Saunders, chief executive of the IMA, says: "For the fourth consecutive month investors have been adding significantly to their investment holdings, with bond funds continuing to be the asset class of choice. Investors appear however not to be ready to put new money into equity funds yet.’

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